Tax Reform

FEATURED ARTICLES ABOUT TAX REFORM - PAGE 3

Although so-called tax reform legislation has yet to be signed into law, Philadelphia's taxpayers already have been forced to pay enormously higher interest costs on money borrowed by the City of Philadelphia and its various entities. I estimate the city has had to commit to as much as $250 million in "tax reform premiums" - a sum that could pay Philadelphia's share of the Convention Center tab. These extra costs are the differential between normal tax-free interest rates and those we have seen since tax reform proposals first frightened the capital markets last spring.

Philadelphia is reeling in the national spotlight after indictments from a federal corruption investigation. Today it needs its City Council to stand up and show that it, too, is fed up with the City Hall status quo. For starters, Council needs to form a majority that can fend off Mayor Street's expected veto of its $3.4 billion budget. The spending plan includes a needed tax-reform package that may bring back some of the thousands of jobs Philadelphia has lost in recent years.

Consumer Party leader Max Weiner, a loser in his effort to remove the tax reform referendum from Tuesday's ballot, has decided to switch his fight from the courtroom to the polling place. "We're urging all of our supporters to vote 'No' to defeat tax reform," Weiner told reporters after Commonwealth Court President Judge James C. Crumlish Jr. rejected his request to delete the question because of alleged misleading language. "We knew we had a long shot, and the court turned down our petition and we have no intention of appealing," Weiner said.

Washington is surging on a wave of euphoria in the aftermath of the Senate Finance Committee's stunning tax-reform success. From the ashes of humiliating defeat, the committee came up with a dramatic package that is almost universally being portrayed as a victory over an array of special interests. Senators are scrambling over one another to get on the side of the public interest in support of tax reform. There are many good reasons for them to do so. A reduction in marginal rates is seen by nearly every economic analyst as good for the economy, growth and productivity.

The Philadelphia Tax Reform Commission, unlike many gutless and forgotten panels of the past, dropped a substantial blueprint for tax reform in the middle of this mayoral campaign - exactly where it belongs. The commission this week approved a plan to remake the city's tax code. The recommendations now go to Mayor Street and City Council, which can embrace, change or abandon them. Long before any such action like that happens, Democrat Street and his Republican challenger Sam Katz can talk about tax reform at their last debate Tuesday in the National Constitution Center.

As the days of 1986 dwindle down to a final few, there are encouraging prospects for a genuine start toward comprehensive tax reform in Pennsylvania in 1987. Democrats and Republicans are weighing the possibilities behind the scenes. People working with Gov.-elect Robert P. Casey, who will take office Jan. 20, are studying various approaches to tax reform. Pencils have been sharpened. Calculators are in hand. One question that has arisen, as would-be tax reformers get down to the nitty-gritty, is how the state budget surplus to be inherited by the Casey administration from Gov. Thornburgh can be used in a practical way to fuel the engines of meaningful reform in the tax structure statewide.

Local tax reform, which is up to voters in the May 16 referendum, is the subject of two informational programs - a debate and a panel discussion - on Thursday. In the morning, state Sen. H. Craig Lewis (D., Bucks), a key player in the formulation of the tax-reform proposal, will debate Edward Balajeski, president of the Bucks County Taxpayers' Association and a strong opponent of the tax reform. The presentation, including an overview of the proposal and a question-and- answer period, will begin at 8 a.m. at the Royce Hotel on Oxford Valley Road, Langhorne.

Last weekend, at an expensive party on Manhattan's Upper East Side, I noticed a group of exquisitely tailored men in their 50s engaged in an uproarious toast. Curious, I joined their happy circle and listened to their joyful banter. "Here's to tax reform," shouted one gentleman, who gripped a tumbler of scotch. "Especially when it means my income tax gets cut in half. " "Wait a minute," said another man, more thoughtful and more eloquent. "Let's first give credit where credit is due. I give you, gentlemen, those farsighted men and women of Congress, who granted us tax relief without fear or favor, without regard to ideology or special interest.

Tax reform is the key issue in the campaign in the First Legislative District, where incumbent Sen. James S. Cafiero is being challenged by Vineland attorney Ronald J. Casella, and two seats in the Assembly are up for grabs. The Republicans hope enough voters are miffed over higher taxes and tie the issue to the Democrats. But the Democrats are pointing to benefits - such as the Homestead Rebate - they say many people in the district received - as a result of the tax- reform measures.

Get ready, taxpayers. Tax reform is coming. Is it good for you? Well, depends on whom you ask. Will you pay less in taxes? Well, depends on who you are. Is it going to affect you anytime soon? The short answer is no. And there is the possibility that state voters will derail the entire package. Most of us can forget about it for one or two years. But others, such as government officials in Abington and Warminster, already are trying to fathom the implications of the sweeping tax package passed by the General Assembly on Nov. 30. And some are skeptical about any government-sponsored program described as "tax reform.